The two-factor theory (also known as Herzberg’s motivation-hygiene theory) was developed by Frederick Herzberg. The theory states that there are certain factors in the workplace that cause job satisfaction, while a separate set of factors cause dissatisfaction.

Two-factor theory distinguishes between Motivators (e.g., challenging work, recognition, responsibility) which give workers satisfaction, arising from intrinsic conditions of the job itself, such as recognition, achievement, or personal growth and Hygiene factors (e.g. status, job security, salary and fringe benefits) which do not give workers satisfaction, but their absence can create dissatisfaction. These are extrinsic to the work itself, and include aspects such as company policies, supervisory practices or wages/salary. The theory prescribes that, if management wants to increase satisfaction on the job, it should focus on the opportunities work presents for gaining status, assuming responsibility, and for achieving self-realization. If, on the other hand, management wants to reduce dissatisfaction, then it must focus on the job environment, working conditions and policies.

Unlike Maslow, who offered little data to support his ideas, Herzberg and others have presented considerable empirical evidence to confirm the motivation-hygiene theory. Their work has been criticized on methodological grounds. Nevertheless, Herzberg and his associates have rendered a valuable service to science and to management through their efforts to apply scientific methods to understanding complex motivational problems at work and have stimulated others to continue the search.